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Home Business and the IRS

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This topic contains 3 replies, has 4 voices, and was last updated by Avatar of Anthony Anthony 7 years ago.

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    Avatar of Robert

    If I start a small online business in my home, will I be more likely to be audited by the IRS or is it better to rent a small office and reduce the audit risk?

    Avatar of Robert

    Thank you for posting. There is no real difference in audit rate between home and office based businesses. As long as you deduct only the allowed business expenses, you should have nothing to worry about. Always talk to a tax expert to make sure you are on the right track.

    Avatar of Jannatun

    want to know the procedure of this online business. how can i sell products by this site? 

    Avatar of Anthony

    Since you are talking about the IRS rather than the Canada Revenue Agency, I must assume that you are from the US. Running a site selling products really isn’t much different from having a physical store. You simply have to arrange for delivery of all of the items that you sell. Get a shipping account with the post office and a reliable courier to facilitate this. If you operate the business under a different name from your own personal name, and if the rules in the US are anything like they are here in Canada, then you should register your business name with state authorities. Make sure that you have all of the tax accounts that you will need. If your state has a state sales tax, you will need an account for that. If you are selling a significant amount of product  into Canada, you will need to also register a Canadian GST/HST account and charge sales tax to your Canadian customers. Secure all of the domain names that you think you will need and get a good web design company to make you a nice, efficient and stream-lined store website. You might also consider registering some trademarks to protect the name of your business and your web URLs.

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